Taoiseach Enda Kenny has said management at Irish Water has to take the public interest into account when devising payment structures at the company.
Speaking in Co Mayo this morning, Mr Kenny said the salary and bonus arrangements at Irish Water were outside the Government's control.
However, he pointed out that the overall costs incurred by the company were being monitored by the regulator.
Mr Kenny said people deserved answers to questions or concerns they had regarding the introduction of water charges.
He said no bonuses had been paid, there was a pay freeze in Irish Water until 2016 and that no long-term service increments had been given to staff.
Mr Kenny said it was important the company worked well in the public interest, but that the feelings of people about pay arrangements also had to be considered.
The Taoiseach said a monitored performance pay model had worked well for Bord Gáis and a similar structure was being put in place for Irish Water.
He said the regulator had already ordered an 8% reduction in the cost base of Irish Water - a substantial element of which related to pay.
An evaluation of Irish Water’s board is due to be carried out next month.
A spokesman for the Minister for the Environment, Alan Kelly, has said that one of the first actions of the new board of Irish Water could be a review of the pay model.
Minister Kelly's spokesman also signalled there would be a review of Irish Water's customer services and a diversion of resources to its call centres to deal with customers.
It emerged yesterday that senior staff at Irish Water and its parent company Ervia, formerly Bord Gáis, may earn annual bonuses payments of up to 19%.
The payments are part of its controversial "reward" scheme.
The details of the scheme were obtained by RTÉ's This Week.
Enda Kenny was also asked about the recent protests against the introduction of water charges.
He said these were entirely legitimate, but he said people could not be prevented from going about their work.
Meanwhile, Minister for Finance Michael Noonan said the Government is committed to addressing the difficulties at Irish Water.
Mr Noonan said he is hopeful that the controversy surrounding the new body will be sorted out in the short to medium term.
However, he would not comment on whether the top management of Irish Water would be changed.
Meanwhile, Minister for Education Jan O'Sullivan has said that she and her colleagues have a lot of questions for Irish Water.
The Labour minister said there are a lot of questions about how people are paid.
She said it is an issue that the Government will be discussing as it wants to ensure Irish Water is transparent.
Earlier, Minister for Communications Alex White said the matter of bonuses for Irish Water is a "matter for the board of that organisation and not a matter for the Government".
Speaking this morning, Minister of State Damien English said he would have a problem if bonuses in Irish Water were paid out wrongly, or to people who were not doing a good job.
Mr English told RTÉ's Morning Ireland that if there was a payments plan in place that would drive productivity at no extra unnecessary cost to the consumer then that was acceptable.
Fianna Fáil Spokesperson on Environment Barry Cowen has called for the Government to show leadership on the issue of bonuses.
Mr Cowen said it was unacceptable that the Government was blaming management at Irish Water.
He said: "We need answers fast as to what the Government's strategy is and whether it will support the roll-out of this outrageous bonus system."
The former chief executive of Northern Ireland Water has encouraged officials in Irish Water to be transparent with the company's investment plans and to be "radical" with its communications strategy.
Trevor Haslett said a report a number of years ago about similar controversies surrounding Northern Ireland Water recommended improvements in its communications and suggested that the company embody a more pro-active role, rather than a re-active role.
Speaking on RTÉ's News At One, he said improvements could also be made to Irish Water's website to make it more customer friendly.
He added: "They could get out there and say: 'Look, we know we've had problems with water supply.
'There's a lot of boiled water notices in some parts of the country.
'Here's what we are proposing to do over the next two years to fix that.
'Here's where your money is going to be going, both in clean water and waste water'."
